Social Security and Retirement in Uruguay

We estimate a structural life-cycle model for retirement behaviour using work history records of the main Uruguayan pension programme. The estimated coefficient of relative risk aversion is around 1.5 and the estimated discount rate is about 1.8 per cent per annum. The marginal disutility of work increases with age and is larger for women than men, and for private than public employees. Simulations show a very low impact of the 1995 pension reform on retirement ages. Many individuals in this population respond little to economic incentives and some individuals would advance rather than postpone retirement after the reform.     

Redefining Who’s ‘In’ and Who’s ‘Out’: Explaining Preferences for Redistribution in Bolivia

How does welfare state expansion reconfigure political coalitions? This paper challenges traditional accounts that pit social policy ‘insiders’, who univocally oppose policy expansion, against ‘outsiders’ who favour it. It argues that labour market vulnerability and partisan cues can play a critical role in shaping the preferences of both insiders and outsiders, and thus produce new pro-expansion coalitions. To test this claim, it employs historical analysis of key social insurance configurations in Bolivia over the last 30 years, as well as an original survey carried out in Bolivia following that nation’s 2007 extension of a noncontributory national minimum pension.     

The economic viability and stability of ‘capitalised family farming’: An analysis of agricultural decollectivisation in Peru

Abstract

The overall goal of this study is to examine if there is a dropout problem in rural China and to explore the effectiveness of a Conditional Cash Transfer (CCT) programme on the rate of dropping out. To meet this goal, we conduct a randomised controlled trial (RCT) to assess the impact of the CCT using a sample of the poorest 300 junior high school students in a nationally-designated poor county in Northwest China. We find that the annual dropout rate in the study county was 7.8 per cent and even higher, 13.3 per cent, among the children of poor households. We demonstrate that a CCT program reduces dropout by 60 per cent. The programme is most effective among students with poor academic performance, and likely more effective among girls and younger students.     

Industrial development in the Brazilian Northeast and the tax credit scheme of article 34/18 1

In this article we consider a twofold problem: (a) the foreign aid cost of changing a stagnant or ‘trapped’ economy to one which is capable of sustaining its own growth, and (b) the accrued benefits of a family planning programme in achieving this. Specifically, we cite the case of an economy trapped in a so‐called low‐level equilibrium and evaluate the change in the amount of foreign aid that is required to achieve self‐sustained growth when the birth rate declines. By use of a simplified model, we conclude that a general 10 per cent reduction in age‐specific birth‐rates may lead to savings of 2 5–50 per cent in discounted aid requirements.     

How Can African Governments Reach Poor Farmers with Fertiliser Subsidies? Exploring a Targeting Approach in Ghana

African governments have been pursuing reforms to improve the targeting of fertiliser subsidy programmes, but recent experience suggests that these reforms have not ensured that subsidies reach intended beneficiaries. Using a targeting approach based on proxy means tests with carefully selected indicators, this paper suggests that Ghana’s fertiliser subsidy programmes can be targeted to the country’s poor and smallholder farmers more efficiently and more cost-effectively. While a universal subsidy in 2012 is estimated to have reached 11 per cent of poor farmers, the proposed targeting approach would have reached 70 per cent of the poor farmers in northern Ghana and 50 per cent of poor farmers in southern Ghana. Targeting reduces the costs of leakages by about 72 per cent, thus justifying the costs of administering targeted programmes using the poverty proxies. Furthermore, we show that once the initial models are constructed, the targeting approach can be used for nearly 20 years without any significant losses in accuracy. We propose that policy-makers should consider implementing this targeting approach on a pilot scale involving a few communities and, if found successful in practice, in a larger-scale programme.     

Interest Rates and Investment in East Asia: An Empirical Evaluation of Various Financial Liberalisation Hypotheses

The article attempts to shed light on the appropriate interest rate policy in the process of economic development. To this end, we examine whether higher interest rates lead to higher investment (and growth) in four East Asian countries. We find that the investment rate went up with real interest rates up to 9 per cent in all four countries but started declining at still higher interest rates in two of the countries. Further, a banking crisis occurred in each of the three countries for which the real interest rates exceeded 9 per cent. This evidence rejects the ‘neo-structuralist’ argument. Nor does it support unbridled financial liberalisation. Yet, it provides only limited support to Stiglitz's case for ‘mild financial repression (real interest rates near zero)’ since reducing real interest rates from say, 6 to 3 or 0 per cent would have reduced investment. The optimum policy seems to be closest to McKinnon's ‘restrained financial liberalisation’ policy, that is, liberalisation with a moderate upper limit (about 6 or 7 per cent) on the real interest rates.     

His,Hers, or Ours: Impacts of a Training and Asset Transfer Programme on Intra-Household Decision-Making in Zambia

This paper studies the effects of a multifaceted asset transfer programme on the decision-making dynamics of smallholder households. Constructing separate indexes of participation in household decision-making for adult females and males, and using difference-in-differences to assess the impact of livestock transfer and training, we find evidence that these interventions increased the share of decisions in which individuals participated, regardless of gender. Increases in decision-making participation by both men and women are driven by an increase in joint decision-making within the household on the extensive margin. Decisions made jointly by men and women increased by 16 per cent across all household activities, with statistically significant declines in independent decision-making by men and women. Findings are encouraging given the evidence of welfare gains associated both with increases in participation in decision-making by women as well as increased cooperation within households.     

Household Saving Behaviour in an Extended Life Cycle Model: A Comparative Study of China and India

This paper examines the determinants of household saving in China and India over the last few decades using the life cycle model, with appropriate modifications to account for the expected benefits of pension saving. Consistent with the predictions made in the life cycle model, higher income growth promotes more household saving, and higher age dependency does the opposite. An increase in the inflation rate appears to encourage household saving. Interestingly, the evidence suggests that an increase in expected pension benefits tends to discourage household saving in China in the long run, but the reverse is found in India.     

Sanitation and Religion in South Asia: What Accounts for Differences across Countries?

Exposure to open defecation has serious consequences for child mortality, health, and human capital development. South Asia has the highest rates of open defecation worldwide, and although the incidence declines as household income rises, differences across South Asian countries are not explained by differences in per capita income. The rate of open defecation in sub-national regions of Bangladesh, India and Nepal is highly correlated with the fraction of the population that identifies as Hindu, in part because certain rituals of purity and pollution discourage having latrines in close proximity to one’s home. Almost all open defecation occurs in rural areas, and this paper estimates how much the rate could be reduced if rural households in regions that have a higher fraction of Hindus, where open defecation is still common, altered their behaviour to reflect that of non-Hindu households in regions that are predominantly non-Hindu, where the rate of open defecation is much lower. Using nonparametric reweighting methods, this paper projects that rural open defecation in Bangladesh, India, and Nepal could be reduced to rates of between 6 and 8 per cent, compared to the prevailing level of 65 per cent.     

Rice Land Designation Policy in Vietnam and the Implications of Policy Reform for Food Security and Economic Welfare

With the aim of promoting national food security, the Vietnamese government enforces the designation of around 35 per cent of agricultural land strictly for paddy rice cultivation. We investigate the economic effects of adjusting this policy, using an economy-wide model of Vietnam with detailed modelling of region-specific land use, agricultural activity, poverty and food security measures. Our results show that the removal of the rice land designation policy increases real private consumption by an average of 0.35 per cent per annum over 2011–2030, while also reducing poverty, improving food security and contributing to more nutritionally balanced diets among Vietnamese households.     

Returning Home after Civil War: Food Security and Nutrition among Burundian Households

This paper investigates the food security and nutritional status of formerly displaced households (HHs). Using the 2006 Core Welfare Indicator Survey for Burundi we compare their food intake and their level of expenses with that of their non-displaced neighbours. We test whether it is the duration of displacement that matters for current food security and nutritional status or the time lapsed since returning home. We use log-linear as well as propensity score matching and an instrumental variable-approach to control for self-selection bias. We find that the individuals and HHs who returned home just before the time of the survey are worse off compared to those who returned several years earlier. On average, the formerly displaced have 5 per cent lower food expenses and 6 per cent lower calorie intake. Moreover, we find evidence in favour of duration of displacement as the main mechanisms through which displacement affects HH welfare. Results are robust after controlling for self-selection bias. Despite international, government and NGO assistance, the welfare of recent returnees is lagging seriously behind in comparison with the local non-displaced populations.     

Climate Instability,Urbanisation and International Migration

This paper focuses on climate-induced migration. We construct a simple theoretical model where, in a first step, climate shocks accelerate the transition from the traditional to the modern sector, leading rural workers to move to urban centres within national borders, while in a second step, downward pressures on wages due to the greater labour supply in cities push people to engage in international migration. To test this hypothesis, we exploit a rich panel dataset, displaying a representative picture of bilateral migration flows and climatic data across 222 countries for the period 1960–2000. Findings suggest that in the next few years the climate-induced growth rate of migrant stocks might be in a range between 8.6 per cent and 12.8 per cent, especially from developing countries, where the level of rural employment is more likely to be affected by climatic shocks.     

Minimum Wage Competition between Local Governments in China

The theory of fiscal and regulatory competition between jurisdictions is more advanced than its empirical testing. This is particularly true of labour regulation in general, and minimum wage regulation in particular, and especially so for developing countries. This paper utilises the spatial lag methodology to study city-level strategic interactions in setting and enforcing minimum wage standards during 2004–2012 in China. We manually collect a panel data set of city-level minimum wage standards from China’s government websites. This analysis finds strong evidence of spatial interdependence in minimum wage standards and enforcement among main cities in China. If other cities decrease minimum wage standards by 1 RMB, the host city will decrease its standard by about 0.7–3.2 RMB. If the violation rate in other cities increases by 1 per cent, the host city will respond by an increase of roughly 0.4–1.0 percentage points. The results are robust to using three estimation methods, Maximum Likelihood, IV/GMM, and a dynamic panel data model. Our findings of strategic interactions suggest the need for policy coordination in labour regulation in China.     

Financial market efficiency in an Agrarian economy: Microeconometric analysis of the Pakistani Punjab

The shadow price of capital in production is a useful indicator of the efficacy of the rural financial system. Using data on participants and non‐participants in a small farm credit programme from the Pakistani Punjab, this article estimates the shadow price of capital. Endogenous switching regressions techniques are employed to control for the likely heterogeneity of borrowers versus non‐borrowers. Results indicate that an individual selected at random from the population of small farmers would experience a 200 per cent rate of return on the first rupee borrowed from the small farm credit programme, indicating a high shadow price of capital and a prima facie case for small farm credit programmes.     

Local Governments and Local Elites

Local government reform 2001 is an important part of the Government of Pakistan's programme for democratic renewal. The main feature of introducing the Local Government System was to empower the people at the grassroots level and to transfer power from the elite to the masses. This paper uses councillors‘ data from north-western Pakistan to examine the economic and social status of village representatives. Land ownership, high income, education and political connections increase the chances of election to public office at the district and sub-district level, but do not have much impact at the village level. There is evidence of genuine change at union (village) level as the majority of councillors (65 per cent) at this level belong to low-income group and small landowners. So the system has changed the identity of the locally politically dominant group. But, at the same time, results suggest that while local governments units are helpful in creating spaces for a broader range of non-elite community leaders to emerge, elite control of decision making is pervasive. However, it is expected that the presence of non-elite members in the councils may change the allocation of resources in favour of the disadvantaged group with the passage of time, provided elections to councils are held regularly.     

An Exploratory Analysis of Fertility Differentials in India

The association between improving economic conditions and declining growth of population has led economists and demographers to hypothesise a direct relationship between indicators of economic development and fertility rates. Using recent National Family Health Survey data and the 1991 Census to explore factors contributing to fertility rates in India, we found that economic variables explain 70 per cent of the interstate variations in India's fertility rates. However, several non-economic variables explain an even greater proportion, for example, indicators of female autonomy explain 84 per cent of the variations. Our analysis demonstrates that to successfully explain Indian fertility rates, models must rely heavily on non-economic variables.     

The demand for manpower—an East African case study 1

Using cross-sectional data from 13 African countries, I compare long-term health outcomes across cut and uncut women. This study is the first to use nationally representative data. Consistent with medical research, no evidence of general health impairments or decreased fertility induced by female genital cutting (FGC) is found; rather cut women have more children. The most pronounced long-term health impairments are a 24 per cent increase in the odds of contracting sexually transmitted infections and a 15 per cent increase in genital problems. Concomitantly, the odds that a cut woman will marry before an uncut woman are 13 per cent.     

The Gender Gap in Agricultural Productivity: The Role of Market Imperfections

This paper hypothesises that labour and credit market imperfections – by discouraging off-farm income-generating activities and restricting access to inputs, respectively – affect female farm productivity more deeply than male productivity. The paper develops a theoretical model, which decomposes the contribution of various market imperfections to the gender productivity gap. Empirically we show that agricultural labour productivity is, on average, 44 per cent lower on female-headed plots than on those managed by male heads. 34 per cent of this gap is explained by differences in labour market access and 29 per cent by differences in credit access.     

Policy design and public support for carbon tax: Evidence from a 2018 US national online survey experiment

Public support for policy instruments is influenced by perceptions of how benefits and costs are distributed across various groups. We examine different carbon tax designs outlining different ways to distribute tax revenues. Using a national online sample of 1,606 US respondents, we examine support for a $20/ton carbon tax that is: (1) revenue neutral: revenue is returned to citizens via tax cuts; (2) compensation-focused: revenue is directed to helping actors disproportionately hurt by the tax; (3) mitigation-focused: revenue funds projects reducing carbon emissions; and (4) adaptation-focused: revenue is directed to enhancing community resilience to extreme weather events. We find devoting revenue to mitigation raises overall support for carbon tax by 6.3 per cent versus the control (54.9 per cent) where no information on spending is provided. Other frames raise support in specific subgroups only. Revenue neutrality raises support among lower-income households (+6.6 per cent) and political independents (+9.4 per cent), while compensation increases support among lower-income repondents (+6.1 per cent).     

Local Government Finance: Assessing the Central Governmant's Contribution

It is widely believed that between 60 to 66 per cent. of local authority expenditure (or income) is met by grants from central government alone. This popularly held view is challenged in this paper through a consideration of the current system of funding. We begin with the rate support grant procedure and identify some common sources of misunderstanding; these concern the definition of the rate support grant itself and the true nature of relevant expenditure. This leads us to examine the question of local authority miscellaneous income from fees, sales, rents and other sources from which we conclude that its contribution is underestimated. However it is general knowledge that besides miscellaneous income local authorities derive their income from two other principal sources namely, government grants and local rates. Accordingly the remainder of the paper examines in turn the contribution of these three sources towards (i) local authority revenue expenditure in respect of rate fund services, (ii) local authority revenue income and (iii) local authority income including both revenue and capital receipts. In no instance does central government's share approach 60 per cent. Thus, it would appear that the contribution of government is being overestimated while that of miscellaneous income underestimated. The implications of this are discussed.